Corporation F is a foreign subsidiary of Corporation D, a U.S.corporation operating solely in State A.Corporation F conducts no business in the United States; however, corporations D and F comprise a unitary group.If a "water's edge" election is made, none of Corporation F's income will be subject to taxation by State A.

Question

Quizplus · Accepted Answer

If a "water's edge" election is made, only the income of U.S. corporations that are part of the unitary group will be subject to taxation by State A. Since Corporation F conducts no business in the United States, its income will not be subject to taxation by State A.

Corporation F Is a Foreign Subsidiary of Corporation D, a U.S.corporation